Celebrities out there thinking of pushing a hot new cryptocurrency had better be careful. The US Securities and Exchange Commision (SEC) says anyone, famous or otherwise, promoting virtual tokens or coins must play by the rules. If not, they risk breaking federal securities law.
Specifically these individuals must disclose any compensation they've received to hawk said cryptocurrency since the coin may in fact qualify as securities. As such, they are subject to regulation in the US. If the proper details aren't made public, prosecution and jail time are distinct possibilities.
"The SEC's Enforcement Division and Office of Compliance Inspections and Examinations encourage investors to be wary of investment opportunities that sound too good to be true. We encourage investors to research potential investments rather than rely on paid endorsements from artists, sports figures or other icons," the regulator said in a statement Tuesday.